This article can also be found at this link, Housing Disaster in Australia and What Can Be Done.
To read all the blogs of this selected group about rentals click on this link, http://menfranco.blogspot.com,
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I belive that past politicians are to blame for today affordable rental problems, and they need to fix it.
NOTE, ARTICLE No: 10.
This article is the tenth article of a group of articles, about Australia housing problems and its cause and remedy discussions. We are reposting some articles to show you, what we believe is the cause of the rental shortage in Australia. You see, the Australian Social Security System fails to help the farmers, because of the assets test, and fails and punishes the small rental investors, because of the ASSETS TEST, that is the only reason I can see, why today there are not enough rental properties on the market. So, to solve the housing problem, the politicians need to abolish or reset the ASSETS TEST at least to the same level or below, what people can lose from their pensions or other benefits. Also, to solve the housing problem, the politicians must find grounds to work together with the private sector, and definitely not against the private sector. But today, from what they are doing, they seem to say that the private sector is their enemy, when the private sector is only running a rental service to the community.
Welcome to our article,
Dear readers, we are posting these articles, to let you know our views about this rental problem. So, we can say that today to buy or rent a residential property in Australia is not easy. Yes, we had these same problems in the past, but it was not as bad as now.
So,
we must look for the reasons why this is happening. I believe that, for this to
happen there must be negative forces that keeps the housing supply not growing
fast enough to keep pace with what is needed. So, what can be done, we may ask?
To
ease the rental market, the federal government, and the local governments must
start building lots of affordable rentals, and rent them at no profit, or at a
loss, this will help to keep the price of rental down. But this by itself will
not be sufficient to solve the rental problem. So, what else needs to be done
urgently to make it better? I believe that they need help from the private
investors, but most investors are not interested in having affordable rental
properties, because there are lots of problems running them and not enough
money, compared to other available investments.
Therefore,
the governments involved should make and pass laws that will help to private
investors to build and own properties, at a moderate profit. You see, nobody
wants to be involved, if there is nothing for them, especially if they can lose
their hard-earned money, if they are not careful. Having said that, now, let us
talk about this rental problem.
Let us talk about the rental problem.
We believe that, TO
SOLVE THE RENTAL PROBLEM, THE ASSETS TEST ON RENTAL PROPERTIES MUST BE REMOVED. Because it cuts down the pension three times more than what they can earn from the pension.
As we have said above, today to buy or rent a
residential property in Australia is not easy, because there are negative
forces, that keep the housing market down, so, hereunder I want
to say what I believe needs to be done as soon as possible, to stop this rental
disaster becoming worse. One of the negative forces is the ASSETS TEST. And it
needs to be removed.
Anyhow, it seems to
me that we need to build lots of new houses and rental properties. The problem
today is that everything is going up in price, and there seems to be a shortage
of builder and building tradesman. There are a few building firms that are
going broke, so, this problem is going to take time to solve, but it can be
solved, if we look at the reasons why this has happened, in the first place,
and the politicians change the laws that need to be changed.
Anyhow, as we have
said the federal government, and the local governments must start building lots
of affordable rentals, and rent them at no profit, or at a loss, this will help
to keep the price of rental down.
But this will not be
sufficient. And we will soon see that, when some figures of what they can build and what they need come out. Therefore, I believe that they need help from the private investors, but most
investors are not interested in having affordable rental properties, because
there are lots of problems running them, a lot of levies to pay, and not enough money, compared to other
available investments.
Today there are still a few old timers that have affordable rental properties for rent, but they are slowly giving it away, because of what they cost to run and because they are being discriminated. They are being discriminated on two fronts. One most people hate landlords, because the people that rent think that they are paying their rent to a rich person, when in most cases the owners are financially struggling to keep the rental business going. Then there all these charges from local authority to pay, one of these is the land tax that gives you nothing, but because you own this land you must pay them. This is like paying the stamp duty every year, like when you buy a property. All these charges plus maintenance, there will not be much profit left to run the property. The other problem is that, if you have a property for rent, everybody thinks that you are a rich person, when in fact this is far from the truth, as we will explain hereunder.
Let
us talk about running rental properties.
Now
let us talk about those people that have a house for rent or a couple of units.
If they are pensioners they might lose their entire government pension, because
of the assets test, when their properties can only earn a few hundred dollars
after all expenses are paid. Which most likely is under 2% of the property
value, according to today market. THIS IS THE REASON WHY, THE ASSETS TEST ON
AFFORDABLE RENTAL PROPERTIES MUST BE REMOVED. If that is not removed nobody
will want to save money to buy a rental property for financial security when
they become old, and those that have a rental property will want to sell them,
because they cannot afford to keep them, they are losing money.
Now,
you must understand that to solve this rental problem, we need the private
people to invest on affordable rental properties, so, there need to be a small
incentive, or at least some security that they are not going to lose their
money, Australia needs those investors, because the governments will never be
able to build and run affordable rental properties for everyone.
ANYHOW,
IT CAN BE A LOT CHEAPER IF THE ASSETS TEST ON AFFORDABLE RENTAL PROPERTIES IS
REMOVED.
Anyhow,
if the assets test on affordable rental is removed, then investors may still
try to own a property for rent, instead of keeping their money it in the bank
earning interest, or some investment that earns money, and you do not have to
do anything.
Today
views on rental properties.
You
see, today people think that those people that have no house, are the people
that have been hit the hardest from this changing economy; but I believe that,
it is the small residential investor has been hit the hardest from the changes.
Because the small investor is being put in a disadvantaged position, not only
they are in a disadvantaged position, but they also can be abused from the
tenants. But what hurts most is that the government treats them as if they are
rich people, when some of them are financially worse off than the tenants they
are housing.
Because
the tenants that are on a low income, can receive rent assistance from the
government. But the landlords cannot receive any help from the government,
because of the assets test threshold, even when their properties income is very
low and they may be starving, so, we may say that they are being
discriminated.
Anyhow,
because I want this article to carry the message that THE ASSETS TEST ON
OFFORDABLE RENTAL PROPERTIES MUST BE REMOVED. I am not going to explain how the
landlords of affordable rental properties are worse off than their tenants. But
later I will write another blog to explain that.
Now,
in this article we have said that to overcome the housing shortage in
Australia, the governments must build lots of affordable rentals, and rent them
at no profit or at a loss.
We
have also said that the governments need help from the private investors, but
the rich private investors cannot be interested in affordable rentals, because
there are lots of problems and not enough money, so, it is up to the mums and
dads the small investors. But they are put in a disadvantaged position from the
assets test. So, THE ASSETS TEST MUST BE REMOVED, or perhaps reset at a lower
rate that reflects what those rental properties can earn. Instead of their
imaginary and impossible 7.5 % when those properties may only earn about 2% or
less net.
I believe that the rental market can be fixed, if the people in charge make laws that do not discriminate the small investors. Starting by REMOVING THE ASSETS TEST on affordable rentals, or modifying it to the right level, where the owners do not lose money, if they are on a government pension, or they are jobseekers, or disabled. I hope I have explained it clear enough. You see nobody wants to be involved if they can lose money.
Anyhow, this article is becoming too long, so, see you in our next article, How to Fix the Housing Disaster, My Views.
To see more click on this link,
See you soon.
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For me there are three main things that the government can do, to come out of this rental crisis: give more rent assistance to the low income earners, abolish the assets test on affordable rental properties and low other levies, so that the small investors can keep renting at affordable price, and stop foreign ownership on rental properties, that is pushing real estate prices up, and the rental market must follow to go up, because the properties cost more.
Some politician believe that the government should build, affordable rental units to solve this rental crisis, but for the government, to build an infinite number of affordable rental units, is not practical, because it will cost the tax payers several times more than helping the present rental set up, as we have suggested above.
To read all the blogs of this selected group click on this link, http://menfranco.blogspot.com,
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